Commercial-Debt Collection Statutes for South Carolina:
South Carolina-Definitions
In addition to definitions appearing in subsequent articles, in this title:
(10) “Consumer” means the buyer, lessee, or debtor to whom credit is extended in a consumer credit transaction. In addition, for purposes of Chapters 10, 11, 13, and 15 of this title, as well as Sections 37-5-108, 37-6-108, 37-6-117(i), and 37-6-118, the term also includes:
- (1) a natural person who is a purchaser or lessee or prospective purchaser or lessee in any transaction arising out of the production, promotion, sale, or lease of consumer goods or services; or
- (2) a natural person who is the object of a solicitation or offer relating to a contest, game, or prize offer subject to Chapter 15.
(11) “Consumer credit transaction” means a consumer credit sale (§ 37-2-104) or consumer loan (§ 37-3-104), or a refinancing or consolidation thereof, a consumer lease (§ 37-2-106), or a consumer rental-purchase agreement (§ 37-2-701).
(14) “Debtor” means any person who is an obligor in a credit transaction, including any cosigner, comaker, guarantor, endorsee, or surety, and the assignee of any obligor. It also includes any person who agrees to assume the payment of a credit obligation.
(28) “Debt collector” means any person who collects or attempts to collect, directly or indirectly, debts due or asserted to be owed or due to another. The term also includes a creditor who collects or attempts to collect their own debts.
S.C. Code Ann. § 37-1-301 (10)-(11), (14), (28) (West, WESTLAW through End of 2004 Reg. Sess.).
What is the Fair Debt Collection Practices Act?
The U.S. Congress enacted the FDCPA in 1977 and added it to the Consumer Credit Protection Act in 1978. Its purpose is to eliminate abusive practices of third-party debt collectors. To that end, the Act establishes guidelines for the conduct of debt collectors, defines the rights of consumers, and prescribes penalties for violations.
The FDCPA defines “debt collectors” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debt … asserted to be owed or due another.”
“Consumers” and “debt” covered under the FDCPA are defined as specifically referring to personal, family, or household transactions. Therefore, debts owed by businesses or by individuals for business purposes (commercial debts) are not subject to the FDCPA.
So, if the FDCPA does not apply to commercial debt collection by third parties, how are commercial collectors regulated?
There are no U.S. federal laws, similar to the FDCPA, that regulate third-party commercial (business-to-business) debt collection or provide guidelines for the conduct of commercial debt collectors.
Who is protecting the rights of commercial creditors and debtors?
Commercial Collection Agency Association
The premier body governing the activities of commercial debt collectors is the Commercial Collection Agency Association (CCAA), an arm of the Commercial Law League of America (CLLA). These organizations are not government bodies, but they require high standards of practice and ethics for a commercial collection agency to become a certified member.
The Commercial Collection Agency Association was established in 1972 to “improve the quality and reputation of the commercial collection industry.” It currently has over 200 members. Approximately 100 core members represent the most prestigious commercial collection agencies in the United States.
The CCAA is an arm of the Commercial Law League of America (CLLA), the oldest creditor’s rights organization in the country, established in 1895.
Membership in the CCAA
- The agency must have been in business at least four years prior to application for membership.
- 80% of the agency’s business must be commercial (business-to-business).
- The agency must maintain a separate Trust Account into which all monies belonging to creditors are placed. This Trust Account is reviewed twice annually by the Executive Director of the CCAA.
- The agency must agree to abide by the CCAA Code of Ethics, which sets ethical standards for dealing with creditors, debtors, and attorneys.
- Executives of the agency must meet continuing educational requirements and attend regular CCAA meetings. The member agency must complete sixty continuing educational credits annually.
- The agency must post a surety bond of at least $300,000 for the protection of the creditors it serves.
- One person in the agency must also be a member of the Commercial Law League of America.
- The agency must agree to random periodic site visits from the CCAA Executive Director.
- The agency must be in compliance with all local and state licensing requirements and regulations governing commercial collection firms.
Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed and bonded in all 50 states (where required).
